Marking a first for Islamic investments in Central Asia and the Caucasus, the ITS Shariah ETF (exchange-traded fund) was listed on the Astana International Exchange (AIX) on 10th January 2025 and admitted onto Kazakhstan’s ITS trading platform on 14th January 2025.
This ETF is offered and managed by IPS Capital, which operates as an Islamic window within the Astana International Financial Centre hosting the AIX. The initial offering on 9th January 2025 saw authorized participants purchase 500,000 units of the fund for US$10 each.
These authorized participants, who have so far invested a total of US$5 million, are the fund’s sole counterparties to act as intermediaries with investors – via the ETF unit trades on AIX and the ITS platform at prevailing daily prices.
“The purpose of the listing on a stock exchange is to enable investors to buy and sell ETF units on the secondary market, normally via a broker or dealer in smaller quantities than would be possible if they were to subscribe or redeem ETF units (directly),” IPS Capital CEO Nurlan Ashimov explained.
This open-ended fund employs a passive investment strategy and pursues a full replication of the ITS Shariah Index, which was launched by the ITS platform operator on 10th August 2023. This index captures large-cap representation of stocks across America, Europe and Asia, including Kazakhstan.
In adopting a full replication strategy, the fund holds all 30 securities included in the ITS Shariah Index in the same proportions – where the concentration limit is capped at 10% per component. The maximum allowable weightage deviation of an underlying stock in the benchmark index is 0.2%.
“As the ETF performance follows an index, returns are not dependent on the fund manager’s expertise.”
Explaining the benchmark choice, Nurlan noted the ITS Shariah Index has achieved an overall notional performance growth of 112.62% since 2021. “These figures illustrate the index’s resilience and potential for long-term growth amidst market fluctuations.”
*Disclaimer: The opinions and viewpoints expressed in the Fund Profile do not constitute as a recommendation for any funds highlighted. The information presented is not investment advice and should not be treated as such.
| ITS Shariah ETF | |
| Fund manager | IPS Capital |
| Launch date | 9th January 2025 |
| Asset class | Public equities |
| Base currency | US dollar |
| Listing | Astana International Exchange, also traded on Kazakhstan’s ITS platform |
| Investment objective | To achieve medium- to long-term capital growth by passive replication tracking of 30 global public equities compatible with Shariah guidelines |
| Benchmark | ITS Shariah Index |
| Risk profile | Low risk |
| Distribution | Profits reinvested, not distributed, to optimize capital gains |
Source: IPS Capital
